Following infection of a permissive cell, influenza viral cytoplasmic mRNA's are transcribed from the virion RNA segments. We showed previously that both uninterrupted (colinear) and interrupted mRNA species are derived from viral RNA segments coding for the matrix protein (M) and non-structural proteins (NS). Two interrupted mRNAs, M2 mRNA and M3 mRNA, are made. To demonstrate that interrupted mRNA's are generated by splicing, cloned mDNA was inserted into SV40 vector so that the late SV40 transcription signals direct the synthesis of (+) strand M RNA sequences. Poly A-containing RNA from African green monkey kidney cells infected with the SV40-M recombinant was analyzed for the presence of M sequences. The results showed that a colinear and an interrupted M RNA species were produced. The interrupted M RNA contained a splice sequence at the juncture similar to that of M3 mRNA found during influenza infection. Persuant to the mRNA analysis, we examined the M-specific polypeptide of the SV40-M recombinant by immunoprecipitation and gel electrophoresis. As predicted, the matrix protein (M1) of influenza virus was detected. Specific splicing from the transcript of SV40-M DNA ruled out the possibility that influenza mRNA's are formed by polymerase "jumping" at the consensus sequences during replication. The presence of colinear as well as spliced M mRNA's establishes that processing occurs during in vivo influenza virus transcription.